For the past 28 years, North Eastern Development Financial Corporation Ltd. (NEDFI) has been the principal organisation in the entire North East which is promoting economic growth. Keeping this into account and other issues, Dibya Kamal Bordloi, North East Bureau Chief of Organiser Weekly, had an exclusive interview with Chairman and Managing Director of NEDFI PVSLN Murty. In this freewheeling interaction, Murty discussed the initiative of the top financial institutions in the North East and explained how small entrepreneurs are being empowered in the North East. Excerpts:
Which significant financial projects is NEDFI working on in the North East?
The Union Government has granted Rs 2,000 crores under the Prime Minister’s Development Initiative for North East Region (PM-DevINE) to the North East area, in addition to the Rs 6,000 crores previously allocated. Every project will be State-specific, and funding will be provided by NEDFI.
What have been NEDFI’s main accomplishments during the past five years in terms of the region’s financial upliftment?
We have been expanding landings to local industries for the past three to four years. In fact, during that time, landings have doubled. By expanding our loan book over the past three years, we have contributed to the growth of MSME’s in the area. Second, we are offering loans to small and micro businesses at extremely low interest rates. As little as seven per cent is charged in interest.
“We will work with the State Governments to establish their own fund, as we have encouraged them to do. We are providing 25 crores to the Assam Government, which has proposed a sum of Rs 200 crores. In the same vein, the Tripura fund was established with Rs 40 crores, and Manipur has contributed Rs 15 crores, with us contributing an additional Rs 15 crores”
Would you kindly provide further details?
See, it’s an easy plan. We support microbusiness owners by offering low-interest loans up to Rs 2 lakh. For their financial needs in the past, these microbusiness owners went to moneylenders or microfinance organisations. However, in each case, the interest rate was extremely high. We now plan to provide up to Rs. 2 lakhs in assistance to these microbusiness owners. The applications will be gathered by microfinance organisations, and the entrepreneurs would receive their funds straight from NEDFI.
How many business owners will NEDFI assist through this initiative?
As you can see, we have approved loans for 10,700 microbusiness owners in the North East thus far. Since the Assam Chief Minister introduced this programme in August 2022, loans of Rs 127 crores have been given. By March 2025, we hope to have crossed Rs. 250 crores. By the conclusion of this fiscal year, we anticipate having lent money to about 25,000 enterprises in total.
Which business categories are included in this programme?
It isn’t going to be sector-specific. Our organisation would provide funding support to any enterprise that shows promise for expansion and employment creation. We have given loans to fisheries, pharmacies, art and craft stores, and other businesses that generate jobs.
You have a plan for the most isolated parts of the region, where there are now no banks or other financial institutions. Can you share details of this plan?
Indeed, we do have a plan for the North East’s most isolated locations. such as Changlang, Lumlei, Mon districts and the areas inside the region that lack an official credit system. MFI isn’t going there either. Thus, we are currently funding the MFI at a seven per cent rate. For the service they are offering and the land in certain inner districts, the MFI will add a percentage to the interest. And the MFI will land to the micro entrepreneurs of those remote areas. Under this scheme we have already financed over 400 micro entrepreneurs in the remotest areas of North East.
Still, there is a significant disparity in the credit system, especially in this area. What is your take on this?
As you can see, NEDFI is insufficient to cover the financial needs of all the borrowers. Banks ought to step up and offer small business owners credit. If not, these microbusiness owners will be forced to pay off private lenders.
What other roles does NEDFI play in the North East?
The Indian Government’s major nodal agency is us. We keep an eye on every programme the national Government runs in this area. The Techno Economic Development Fund (TEDF) is managed by us as well. We do economic and technological studies under this fund that benefit the area. For instance, we conducted four air stripes surveys for the Government of Nagaland and investigated the issue of microplastic in the Brahmaputra River for the Government of Assam. We have completed 100 studies as far for the eight States in the North East, all of which are very advantageous to the area.
What initiatives is NEDFI taking to support North East startups?
The Government of India chose to establish a startup fund specifically for the North East in 2017. For North East specifically, we have established a Rs 100 crore startup fund. Thus far, NEDFI has made investments in 64 startups within the region. Approximately 40 per cent of these ventures are thriving and have been awarded our second phase of funding. We assist these firms in obtaining funding from other investors as well.
What is the North East State Governments’ response?
We will work with the State Governments to establish their own fund, as we have encouraged them to do. We are providing 25 crores to the Assam Government, which has proposed a sum of Rs 200 crores. In the same vein, the Tripura fund was established with Rs 40 crores, and Manipur has contributed Rs 15 crores, with us contributing an additional Rs 15 crores. Currently, Sikkim, Meghalaya and Nagaland are also entering the league. In addition,
we offer advice and consultancy services to startup units and the States.
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